Wednesday, February 10, 2016

Coca-Cola stops production at Jaipur plant following NGO campaign against "indiscriminate" groundwater mining

By Our Representative
Coca-Cola, one of the world’s premier soft drinks corporations, has stopped production at its bottling plant in Kala Dera in Jaipur, Rajasthan, with no plans to resume operations. Quoting a document in Hindi, India Resource Centre (IRC), a Global Resistance project, which campaigned against the plant, says that the plant was “disputed” as it was "indiscriminately mining groundwater."IRC, in alliance with a local NGO, Kala Dera Sangharsh Samiti, has been campaigning against the company’s plant since 2003, accusing it of “exacerbating water shortages in the area.” In 1998, the area’s groundwater was declared as overexploited – the worst category of groundwater in India, yet Coca-Cola built a new bottling plant in 2000, IRC says an IRC communiqué.
Claims IRC, one of the reasons for the recent decision to stop production at the plant is, it had begun incurring financial losses. “Now it will serve solely as a storage and distribution center, according to a petition filed by the company”, it adds.
Accusing Coca Cola for “irresponsible business practices in Kala Dera”, IRC says, groundwater mining in the water scarce area, aggravating water shortages for the farmers and residents, all of which is “well documented.”
“In 2014, Dr Aneel Karnani of the University of Michigan's Stephen M Ross School of Business found Coca-Cola’s corporate social responsibility claims around its bottling plant in Kala Dera in India to be lacking merit”, says IRC. He concluded that the company’s extraction of groundwater in the water stressed area has led to the “tragedy of the commons”, it adds.
In 2008, Coca-Cola paid for an assessment of some of its bottling plants in India, including Kala Dera. The Energy and Resources Institute (TERI), which conducted the study, recommended that Coca-Cola shut down its Kala Dera plant.
IRC quotes TERI as saying, “The plant's operations in this area would continue to be one of the contributors to a worsening water situation and a source of stress to the communities around.” However, it adds, “Coca-Cola ignored the recommendation.”
“We have campaigned for shutting the plant and we welcome the closure”, said Mahesh Yogi of the Kala Dera Sangharsh Samiti, a local group that has led the campaign. “However, Coca-Cola must also be held accountable for the damages it has caused to the farmers, to the watershed and to the community”.
“We have always known that Coca-Cola’s plant in Kala Dera would shut down one day because it would run out of water, as it has now. We would have preferred that Coca-Cola should have acted responsibly and never operated in a highly water stressed area”, added Amit Srivastava of IRC.
Srivastava demands, “Coca-Cola and its investors must take responsibility for the depleted watershed and the financial loss to farmers because of the company’s complete lack of respect for the communities’ right to water which has led to the tragedy of the commons.”
He adds, “Allowing Coca-Cola to just walk away after completely devastating the groundwater resources is not ethical, sets a bad precedent and the company must be held to account.”
Meanwhile, IRC says, Coca-Cola continues to face crisis in India due to its “mismanagement" of water resources, including the forced closure of their bottling plant by government authorities in Kerala in 2005, and closure of its 15-year-old plant in Varanasi."